Mall gift card

Mall operator sued for violating state law regarding gift-card fees

New York State Attorney General Eliot Spitzer's office has filed a lawsuit against the owner of several prominent shopping centers for violating the state's restrictions on fees on gift cards.

Simon Property Group Inc., which operates 10 retail-shopping malls and outlet centers in the state, including Waterloo Premium Outlets in Waterloo (Seneca County), was served with a lawsuit, which was filed in Manhattan State Supreme Court, alleging that fees on its "Simon Giftcard" violate a recently enacted state law.

At its shopping malls and on its Web site, Simon promotes and sells pre-paid gift cards. It charges a fee of $1.50 for each card if purchased at its malls, or $5.95 for "shipping and handling" if purchased on the Internet. In addition, Simon charges a $2.50 monthly "administrative" fee beginning in the seventh month after purchase, a 50-cent fee for each telephone-balance inquiry, a $5 fee to reissue a lost or stolen gift card, and a $7.50 fee to reissue an expired card.

The Attorney General's lawsuit charges that Simon's assessment of a monthly administrative fee on gift cards purchased after Oct. 18, 2004, violates the state law that bans monthly service fees on gift cards until the card has been unused for 12 full months.

Spitzer's office also alleges that Simon is violating another provision of the law by assessing a $5 fee to replace a lost or stolen gift card without conspicuously disclosing that fee on the gift card itself.

Other retail shopping centers owned and operated by Simon are in Nassau, Suffolk, Westchester, Rockland, Orange, and Chautauqua counties.

Individuals wishing to file a complaint about gift cards are encouraged to contact the Attorney General's office by calling his consumer help line at (800) 771-7755, or by visiting the Web site at www.oag.state.